Gold World News Flash |
- Silver. Need I say more?
- The U.S. Dollar’s Impact on Price Action in the S&P 500, Gold, & Oil
- Fibonacci Gold
- 60 Minutes Overtime | Mortgage Mess: Who Really Owns Your Mortgage?
- The U.S. Dollar's Impact on Price Action in the SP 500, Gold, and Oil
- Silver and Gold Will Remain in Strong Uptrends
- Where has Silver come from and where is it going?
- Here?s the DEFINITIVE Article on Why Gold?s Going MUCH Higher
- Must-Watch "Inside Job" - The Public Got Screwed And We Haven't Held Them Accountable
- The Contrarian View 4th April-8th April
- Things
- How The Fed Sourced 83.4% Of Treasury Cash Needs Since The Start Of QE2
- How the FOMC Press Conference Might Go
- Urge Bloomberg News to challenge Fed next on gold market rigging
- Paul to examine mint's failure to coin enough gold and silver
- Guest Post: The Dirty Secret of the Debt Ceiling Debate: Nobody Wants Treasuries
- Adrian Douglas: Deception and cover-up at the Fed
- Real Bullion Begins to Decouple from Paper-Bullion
- Michael Kosares: Saudi king got far more gold for his oil in 1933
- A Silver Keiser sold earlier today for $89. These auctions reflect the real price of Silver, don't belive the paper nonsense on the Comex.
- International Forecaster April 2011 (#1) - Gold, Silver, Economy + More
- Gold Market Update
- King Ibn Saud's 35,000 British sovereigns – Gold's historic undervaluation versus oil
- Precious Metals - Week of 4.3.11
- Why Everyone Should Buy Physical Silver
- Gold Forming Bearish Double Top?
- In March, Paul introduced H.R. 1098, the Free Competition in Currency Act of 2011, which would repeal legal tender laws in order to prohibit taxation on gold, silver, platinum, palladium and rhodium bullion
- How Far Are We From a Gold Standard?
- Is Gold in a Bubble Now? Both Sides of the Coin
- Utah Gold Standard, Part I
| Posted: 03 Apr 2011 07:46 PM PDT Stacy Summary: I guess I could ask, where is Max with the pics of silver breasted and bottomed ladies? I would have thought $38.41 deserved a silver bottom or two? Share this:
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| The U.S. Dollar’s Impact on Price Action in the S&P 500, Gold, & Oil Posted: 03 Apr 2011 04:03 PM PDT I was starting to put on my bullish hat on Friday morning when out of the blue an ugly close has forced me to rethink my position. After viewing a few hundred charts, I have determined that while I am still leaning into higher prices at this point in time, I will not totally rule out a rollover on the S&P 500. In coming days the news flow will be extreme and headline risk will be everywhere we look. The S&P 500 has been able to deflect worry for quite some time now and in every case the resiliency is unquestionable. However, we are nearing the beginning of another earnings season which will start in just a few weeks' time. First quarter earnings for 2011 are going to be quite interesting and most analysts' estimates are relatively challenging. Will the rubber hit the road into earnings? Are we about to see a double top play out into earnings, or is there going to be a breakout which will take us to the SPX 1,400 – 1,415 price level? SPX illustrates the two key price levels: In a...
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| Posted: 03 Apr 2011 03:56 PM PDT This article will examine the current up leg in gold price that originated in October 2008, present a study of the Fibonacci relationships of this price movement that are evident both in terms of price and time, and offer a projection of future price movement within the time frame suggested by the evidence. We will begin with a simple weekly chart of the World Gold Index (XGLD) and employ a diagonal support trend line and three horizontal lines identifying price breakout levels. No doubt you will notice that price movement has been subdivided into three completed stages, each separated by a new break higher through a horizontal resistance line. And, current price is contemplating a move higher that would take it into a fourth stage of the up leg. This first chart gives us a general concept of the shape, size, stages and elapsed time of this massive up leg in gold. This will be important to keep in your mind as the following charts will add considerable visual complexity to this...
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| 60 Minutes Overtime | Mortgage Mess: Who Really Owns Your Mortgage? Posted: 03 Apr 2011 03:51 PM PDT
Mortgage mess: Who really owns your mortgage?Do you know who really owns your mortgage? As Scott Pelley reports on "60 Minutes" this week, that question has become a nightmare for many homeowners since the invention of mortgage-backed securities. Yes, those were the exotic investments that sparked the financial collapse in this country. And the're still causing problems. As it turns out, Wall Street cut corners when it bundled homeowners' mortgages into securities that were traded from investor to investor. Now that banks are foreclosing on people, they're finding that the legal documents behind many mortgages are missing. So, what do the banks do? As Pelley explains in this video, some companies appear to be resorting to forgery and phony paperwork in what looks like a nationwide epidemic. Even if you're not at risk of foreclosure, there could be legal ramifications for a homeowner if the chain of title has been lost. Watch the "60 Minutes" report and listen to Pelley's discussion with "60 Minutes Overtime" editor Ann Silvio about the findings of his reporting team. Have you contacted your mortgage servicing company to find out whether your mortgage has been bundled and sold? Did you get a clear answer and a copy of your mortgage paperwork to back it up? www.4closureFraud.org
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| The U.S. Dollar's Impact on Price Action in the SP 500, Gold, and Oil Posted: 03 Apr 2011 03:20 PM PDT I was starting to put on my bullish hat on Friday morning when out of the blue an ugly close has forced me to rethink my position. After viewing a few hundred charts, I have determined that while I am still leaning into higher prices at ... Read More...
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| Silver and Gold Will Remain in Strong Uptrends Posted: 03 Apr 2011 03:00 PM PDT Silver and Gold have corrected after Gold hit a new all-time high a few weeks ago, and short-term traders took that as a profit taking opportunity. However, the uptrend will soon resume and new highs significantly above Gold's recent all ... Read More...
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| Where has Silver come from and where is it going? Posted: 03 Apr 2011 01:00 PM PDT GFMS produced the report for the Silver Institute published last week. We have used this as a basis for this article on silver supply and demand in the last three years. Our objective in this piece is to have recent history confirm what we expect of the future for silver.
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| Here?s the DEFINITIVE Article on Why Gold?s Going MUCH Higher Posted: 03 Apr 2011 12:00 PM PDT [B]Economic Environment Suggests Gold*NOT in a Bubble[/B] [Whatever you want to] call it – a bubble, a frenzy or* a mania – there seems to be a large number of voices in the marketplace who just are not fans of gold, whether prices are moving up, down or sideways [but] the reality is that gold doesn't possess the traits necessary for a financial bubble to form. [In fact, the current worldwide economic and fiscal environment suggests that gold will go MUCH higher. Let me explain.] Words: 1899 So*says*Frank Holmes*([url]www.usfunds.com[/url])*in*an article* which Lorimer Wilson, editor of www.munKNEE.com, has further edited ([* ]), abridged (…) and*reformatted*below for the sake of clarity and brevity to ensure a fast and easy read. I have added*15 hyperlinks – yes, 15!)*to other articles*to support and expand upon Holmes article to make it the most comprehensive of any such article to be found anywhere. (Please note that this paragraph must be included in any article...
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| Must-Watch "Inside Job" - The Public Got Screwed And We Haven't Held Them Accountable Posted: 03 Apr 2011 10:27 AM PDT Courtesy of http://www.openculture.com/ you can watch the movie "Inside Job," narrated by Matt Damon. The movie does a good job, generally, in translating into layman's terms how the financial bubble was perpetrated by Wall Street, in collusion with the Government - both Republican and Democratic administrations. It's great that the public can see some of the truth and facts laid out like this. And it's great that Congress forced some of the CEO's to be publicly humiliated, somewhat. But the bottom line is that many people, from Hank Paulson to Angelo Mozillo to the regulators who moved from DC to Wall Street, made $100's of millions derived from willing and motivated corruption and fraud and were never held accountable. Congress has not held these people accountable. The Bush and Obama adiminstrations have not held them accountable. The people of this country have not held them accountable. These are people who would have been thrown in jail and forced to disgorge their wealth in another era of this country. Here is the link: INSIDE JOB The corruption and lack of accountability stretches from Alan Greenspan dating back to when he worked for Charles Keating and defended Keating's fraudulent use of S&L money - the losses of which were paid for by the taxpayer ultimately - to today's Wall Street CEO's and even Ben Bernanke. Watch the movie and you'll see what I'm alluding to with regard to Bernanke and his henchmen at the Fed. One of these days there will be accountability demanded in this country, only it will like take the form of social uprisings similar to what we are witnessing in the Africa and the Middle East. Until then, the best way to profit and take advantage of this mess is to continue accumulating gold and silver and mining stocks. Becuause as long as the fiscal and financial policies of this country continue to enable this fraud and corruption and lack of accountability, more and more capital will flow into gold and silver, which both have been honest money for over 5000 years. 
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| The Contrarian View 4th April-8th April Posted: 03 Apr 2011 10:12 AM PDT
So why bother with a contrarian outlook? Click me to get some background on these reports This weeks COT Index Review
S&P 500: Last weeks newsletter described a strong shift in the commercial positioning in favor of the bulls. This week the report has softened a little and taken a more neutral stance. (Commercial traders lead this COT report). Bias: Neutral
EURUSD: The long side bias and COT set up for the Euro has increased this week. We are very close to the most bullish the Euro COT has been in 6 months. (Large traders lead this COT report) Bias: Bullish
GBPUSD: GBPUSD COT positioning has become very volatile switching from bearish to bullish and from bullish to bearish very suddenly in a last few weeks. This week we are seeing an increasingly bearish COT set up which remains as last week in the neutral zone. If the Commercial Index was over 70 we would have a full bearish set up. (Large traders lead this COT report) Bias: Neutral
USDJPY: COT positioning has become neutral this week. (Large traders lead this COT report) Bias: Bearish
GOLD: A neutral COT set up this week for Gold (Large trader lead this COT report) Bias: Bearish
CRUDE OIL: Still a strong bullish set up in play with crude oil that doesn’t seem like it will be leaving us anytime soon. (Large traders lead this COT report) Bias: Bullish FX Retail Trader Position Analysis This report describes a contrarian view on current retail trader positioning in FX Click me to get some background on these reports
USDJPY: 74.26% of retail traders were long last week this week that number has dropped by 10% to 64.65% even though they have been correct. Global intervention to weaken the Yen has led to sustained upside strength in this pair regardless of what the market as a whole is doing. Bias: Bearish
EURUSD: Retail short positioning is increasing dramatically with 70.15% of retail traders short the EURUSD as it makes multi-month highs. Both the COT and Retail positioning report support a long bias. Bias: Bullish
GBPUSD: Neutral again this week, confirming the overall COT view Bias: Neutral Provided by Pivotfarm.com Support and Resistance
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| Posted: 03 Apr 2011 10:12 AM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! April 03, 2011 02:07 PM [LIST] [*]Commentary on Grandich Client Donner Metals [*]But thankfully they don’t intervene in the stock and gold market-lol [*]The U.S. flunks 21st century financial prophet’s test. [*]U.S housing market three times worse [*]Say no to U.S. Treasuries [*]Sneak attack? [*]Sadly, it’s about to happen [/LIST] [url]http://www.grandich.com/[/url] grandich.com...
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| How The Fed Sourced 83.4% Of Treasury Cash Needs Since The Start Of QE2 Posted: 03 Apr 2011 08:29 AM PDT
It is no secret that since the start of QE2 in November, the US Treasury has issued a gross $890 billion in debt in the form of various Bond, Bill and TIPS. This is cash that the US received in exchange for promises to pay interest and principal at maturity on various series of bonds. At the same time, over the past 5 months, there was $291 billion in debt maturity paydowns, or cash leaving the Treasury and going to those who are lucky enough to receive principal on US debt at maturity. That leaves a net of $589 billion in debt that was issued between November 1 and March 31: money used to fund the ongoing operations of the United States. This is all perfectly public and well-known. After all, every single auction is loudly announced by CNBC at 1 pm Eastern on auction days, with a breakdown between Direct, Indirect and Primary Dealer takedowns. Note that the Fed does not feature in this list of primary issuance bidders as that would be illegal, and would be monetization beyond even any semantic argument that the Fed does not, in fact, monetize. What is less known is that the true action in US Treasurys occurs in the secondary market, or that dominated by the Federal Reserve. Here is where the daily POMO takes place, where as we have noted on many, many, many occasions Primary Dealers promptly flip bonds purchased during a primary auction right back to the Fed. This is where the real source of Treasury funding comes from. And what many may not be aware of is that since the start of QE2, the Federal Reserve has purchased $491 billion of Treasurys in the Open Market (and $556 billion since the start of QE Lite). This $491 billion in indirect monetizations ultimately ended up funding government cash needs. In other words out of $589 billion in net issuance, the Fed has been responsible for 83.4% of the money needed to fund government transfer payments (among many other uses of funds) and keep the US consumer "strong", not to mention funding US defense, education, healthcare and every other aspect of US day to day cash needs. QE2 is supposed to end in precisely three months. During that time the Fed will fund another $400 or so billion in US cash needs. What happens after, nobody knows. The same story in chart form. First, we present the official story of who buys Treasurys at auction. This chart shows the monthly take down of all auctions since November, broken down by Primary Dealer, Indirect (foreign) and Direct (everyone else) investors (as well as token non-competitive purchases). Note: no Fed here.
On the chart above note that in March we had the smallest absolute Indirect interest in US Treasurys (a delta filled by the return of the mysterious Direct Bidder). The next chart shows the same story but broken down by new bond issue maturity. The two bonds sought after the most are 2 and 5 Years, of which $175 billion has been auctioned off each.
Next, we refine the issuance data, by going from gross issuance to net: namely removing contractually require cash outflows in the form of Pay Downs, showing what the true New Net Cash inflow is (black line).
Which brings us to the key chart: the only question remains how much of this net cash need comes from the Fed. The answer: 83.4% of the total cash over the last 5 months. And the only reason this number has declined is due to the increasingly lower amount of MBS that are prepaid to the Fed, resulting in a lower QE Lite component of Treasury funding. What is amusing is that in January the Fed indirectly funded $122.1 billion of total Net cash needs of $113.2 billion, or a 108% overfunding.
And so now everyone knows just who is reponsible for the ongoing funding of the US government. Amusingly, Congress squabbles over a government shutdown due to a $30 billion discrepancy which is the amount the Fed monetizes in one week. A far bigger question for the government's ongoing operation, is just who will step in to provide this 83.4% of ongoing cash needs when the Fed supposedly ends monetizing debt on June 30. Which incidentally brings us to one tangential point. As Stone McCarthy demonstrates, the average maturity of the Fed's $1.33 trillion in Treasury holdings (and $1.7+ trillion by the time just QE2 is over) has declined consistently since 8 months ago, dropping from over 80 months to just 66.7 months.
We expect by the time QE2 is done that the average maturity of Fed holdings will be under 5 years. In other words, should the Fed go ahead and actually reverse its buying patterns, which means at some point it will be forced to flood the market with Treasurys of increasingly shorter maturity, the UST curve will pancake overnight, as the market panics, discounting such a move by the Fed. This means that the 2s10s will go from 264 bps currently to sub 100 bps, or possibly invert, as the curve of such stalwart countries as Ireland and Portugal is doing recently. This is tantamount to the immediate execution of all financial institutions in the US that rely on borrowing near and lending far (read all of the hedge funds formerly known as banks). So before anyone tells us that the Fed is preparing to tighten, be it by ending monetization, ending ZIRP, or even hiking rates, can they please explain to us just what will prevent the outright second insolvency of the US banking system?
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| How the FOMC Press Conference Might Go Posted: 03 Apr 2011 07:12 AM PDT With dissension in the ranks growing, the dovish bent for central bank policy was saved late last week by New York Fed President William "You Can't Eat iPads" Dudely after Fed head James Bullard started talking about pulling up short on QE2 and then Narayana Kocherlakota said it might be better to raise interest rates sooner, rather than later. Fed Chairman Ben Bernanke was no doubt watching all of this and is now probably forced to consult his Fed Hawk-O-Meter more often than usual as he gets ready for his first post-FOMC press conference later this month. Here's what things might have sounded like if that press conference had been conducted on Friday, at least the version offered up by Dave Cohen over at Decline of the Empire.
The Fed chief's last comment was "I am the invisible hand!", a statement that, like a lot of other things associated with the Fed, would be much funnier if it weren't true.
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| Urge Bloomberg News to challenge Fed next on gold market rigging Posted: 03 Apr 2011 05:54 AM PDT 1:49p ET Sunday, April 3, 2011 Dear Friend of GATA and Gold: Bloomberg News this week published an excellent column, appended here, by its editor in chief, Matthew Winkler, about the Bloomberg federal lawsuit that defeated the Federal Reserve's secrecy in lending to troubled financial institutions. GATA long has appealed to Winkler and other Bloomberg News journalists to investigate the Fed's involvement in the surreptitious rigging of the gold market, but without success. In his column Winkler argues that much still has to be done to hold the Fed accountable to the public, and the column concludes with his e-mail address. So please take a minute to send Winkler a note thanking him for his column and for Bloomberg's heroic challenge to the Fed's secrecy and urging him to continue by challenging the Fed's secrecy about its rigging of the gold market. You might add that GATA has documented this rigging at great length here -- http://www.gata.org/taxonomy/term/21 -- has itself sued the Fed for access to its secret records about gold, and would be delighted to provide Bloomberg News with information on the subject. Just a few critical questions to the Fed about gold, posed by a major news organization, could bust the gold price suppression scheme wide open while exposing all sorts of other surreptitious market intervention as well. CHRIS POWELL, Secretary/Treasurer * * * Legacy of Fed Crisis Made It the People's Bank By Michael Winkler http://www.bloomberg.com/news/2011-03-31/fed-crisis-legacy-made-it-the-p... Americans can take comfort knowing that Congress and the courts affirmed what may prove the most reassuring legacy of the worst financial disaster of our time: The Federal Reserve is the people's bank and is obligated to share what it knows and does with the citizenry it serves. When the Supreme Court last month decided to leave intact a lower court's order, it validated the notions that transparency is an essential requirement of democracy and that the Fed is no less accountable than any other institution in our government. The release yesterday of about 29,000 pages of data has already yielded insights. For example, a European bank, not an American one, was the biggest borrower from the discount window during the height of the 2008 panic. Bank of America Corp. (BAC) visited the discount window more often than it has disclosed. And the Bank of China Ltd. and Arab Banking Corp., a Bahrain-based bank controlled by the Libyan Central Bank, both tapped the window. ... Dispatch continues below ... ADVERTISEMENT The Gold Standard Now: It Can Work Today a dollar is worth 80 percent less than it was 40 years ago, and less than 5 percent of its value a hundred years ago. We deserve a dollar that is as good as gold, a dollar that will hold its value from year to year so we can be financially secure and our economy can generate more and better jobs. For most of America's history, our dollar was literally as good as gold. But on August 15, 1971, our politicians destroyed the link between gold and the dollar. They destroyed the foundations of our economic system. A new Internet site, TheGoldStandardNow.org, provides news and cutting-edge analysis about this most important issue and explains how the gold standard worked in the past and how it can work in the future. Visit us today: http://www.thegoldstandardnow.org/about/137-welcome-newsmax Congress, which last year carved an exemption for the Fed's discount window into its Dodd-Frank financial regulatory law, will now get a look at specific loans that went out through the window in 2008. This presents a second chance for lawmakers to require the central bank to disclose the collateral it accepted for those discount window loans during the financial crisis and for its lending through other programs. U.S. Sen. Bernard Sanders, a Vermont independent who wrote most of the Fed transparency provisions in Dodd-Frank, has said the central bank should have already revealed more. While an audit by the Government Accountability Office that's due in July may lead to additional disclosures, Congress should insist on them. More than two years after the fact, the public ought to know what sort of risks its central bank took when borrowers came to the lender of last resort. At stake is the individual's right to know how the public as involuntary investors provided loans to banks and in what amounts. How we reached this point can be attributed in no small way to a reporter's quest to share with his readers how the Fed, for the first time since its inception in 1913, created $2 trillion of assets and debts to bail out banks. After his repeated attempts to obtain this data were rebuffed, the late Mark Pittman, who reported on credit markets, sued the Fed through Bloomberg News' parent company under the Freedom of Information Act. The Fed initially said that U.S. citizens don't have the right to know these things and resisted all requests for an accounting under FOIA. When its lawyers went to court to prevent disclosure, federal Judge Loretta A. Preska of the Southern District of New York ruled that the central bank is obligated to release records of its lending on behalf of the taxpayer. The Fed took the case to the U.S. court of appeals in New York, which upheld Preska's ruling. The central bank declined to pursue its claim to the highest court, leaving it to the Clearing House Association, which represents the country's biggest commercial banks, to make the final appeal. U.S. law, as the courts have defined it, says that central bank independence doesn't mean independent from the people. Independence means independent from the executive branch, not from Congress, which alone has the constitutional power to coin money. Congress delegates that power to the Federal Reserve. At some point long before financial markets collapsed in 2008, the Fed forgot that it is the central bank for the people of the United States and not a private academy where decisions of great importance may be withheld from public scrutiny. The Obama administration, which paradoxically championed transparency in government when it came into office and then for two years supported the Fed in its resistance to be transparent, ultimately decided to let the lower court orders stand. Still, this reversal wasn't a sign that the administration was embracing the president's directive to "adopt a presumption in favor of disclosure, in order to renew their commitment to the principles embodied in FOIA." Instead, the solicitor general merely acknowledged that, in many ways, Congress had already settled the question. The showdown over transparency culminated in July with the passage of the Dodd-Frank Act requiring the Fed to disclose its lending on a two-year lag from now on. That change, which institutionalized transparency, represents a turning point in the way the U.S. central bank does business, and begins a new era of accountability for the lender and its borrowers alike. For all its virtues, Dodd-Frank didn't require a public accounting of discount window lending during the financial crisis. Now, the courts have filled in that gap. The public will get a view into how the Fed used public money to shore up banks that were struggling as a result of conditions the banks themselves helped create. Shareholders in banks where executives' poor decisions were, in part, papered over by the Fed's lending will be able to see just how important the discount window and the unusual steps taken to boost its lending beginning in August 2007 were to keeping their banks afloat. While the notion that no U.S. institution is above accountability has been affirmed, we cannot wait patiently for government institutions to lift the veils of secrecy. We have to open them ourselves as part of the democratic process. The courts already acknowledged that the world doesn't end when information is released, so we have to question the motivations behind the Fed's policy of secrecy and by extension the rationale of all government departments to resist disclosure. After all that has been said and done, we still don't know whether the Fed was accepting unsuitable collateral to keep insolvent banks afloat. And we still don't know why the Fed and the Obama administration so strenuously protected the identities of the discount window borrowers. All of us stakeholders, especially the historians among us, might like to know who borrowed from the discount window from 1914 to 2008 as well. ----- Matthew Winkler is the editor-in-chief of Bloomberg News. The opinions expressed are his own. To contact the writer of this column: Matthew Winkler in New York at mwinkler@bloomberg.net. Join GATA here: An Evening with Bill Murphy and James Turk https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php
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| Paul to examine mint's failure to coin enough gold and silver Posted: 03 Apr 2011 05:26 AM PDT 1:27p ET Sunday, April 3, 2011 Dear Friend of GATA and Gold (and Silver): Daniella Cambone of Kitco News reports that U.S. Rep. Ron Paul, R-Texas, chairman of the House Subcommittee on Domestic Monetary Policy, plans to hold a subcommittee hearing this week on the U.S. Mint's failure to keep up with public demand for gold and silver coins. Cambone's text report summarizing her interview with Paul is here: http://www.kitco.com/reports/KitcoNews20110401DC_ron_paul.html Video and audio of the interview are here: http://www.kitco.com/KitcoNewsVideo/kitco_news.htm CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php Join GATA here: An Evening with Bill Murphy and James Turk https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Guest Post: The Dirty Secret of the Debt Ceiling Debate: Nobody Wants Treasuries Posted: 03 Apr 2011 05:19 AM PDT
Submitted by Mark McHugh The Dirty Secret of the Debt Ceiling Debate: Nobody Wants Treasuries On this side of the rainbow, “How much money should an uncreditworthy entity be allowed to borrow?” is a rhetorical question. In Washington DC, it’s a topic of much rhetoric. In fiscal year 2009 Congress borrowed 53.5 cents of every dollar they spent. In FY2010 they borrowed 48 cents of every dollar (*check your numbers, Santelli). So they’ve borrowed and spent 3.5 Trillion to produce 255 Billion in GDP growth (7% efficiency!), never even bothered to pass a budget for FY2011, and still haven’t managed to get a single bankster put in jail. Now these whores are lecturing us about “moral obligations.” They also swear they’re gonna straighten up and fly right this time. There is one little detail they forgot to mention – no one actually wants to lend them money. Welcome to the last resort. Everybody knows that the Federal Reserve has the unique ability to create money out of nothing. What most don’t know is the Fed, not the Treasury, provides most of the explanations as to who is buying Treasuries (read the footnotes). So to those who said, “I told you so!” when the Treasury revised China’s holdings by $268B in February, welcome to the pee-pee in your coke moment. That revision brought China’s purchases to $577B in the two years period ending June 2008. That was:
And you swallowed it. Of course had you done even a little research you’d have understood that the data is about as helpful as an eight month old snapshot of the Universe:
~From “Why Treasury’s Data is Crap” by The Federal Reserve I can hear you still clinging to your Scooby-Doo thesis, but anyone who speaks of “demand” in the US Treasury market at all displays their ignorance. Like this is some giant game of Hungry, Hungry Hippos. Take a peak at this report and you’ll see that ownership is an antiquated concept when discussing US debt. Transactions of long-term Treasuries with foreigners during the last two fiscal years totaled more than $50 TRILLION, ($160,000 per US citizen) . So if you insist on having a six year-old understanding of things, I suggest Gnip-Gnop.
Speaking of six year-olds, I blame the tooth fairy for all of this. Most American children’s first brush with economics is the notion that somebody or something out there is actually willing to pay money for their crummy, little teeth. It is a convenient lie that distracts children from the pain and anxiety of losing body parts. Most of us evolve beyond this delusion, the rest become US congressmen and TV pundits. Face it America, no one wants your debt. The tooth fairy is all you’ve got left, and it’s been that way for a while.
When I fill up at the local gas station using my debit card, the money is gone from my account before I can drive home and log on to my bank’s website (less than 5 minutes). Details about Treasury purchases are trickled out at an agonizingly slow pace that literally takes years to complete. That’s right, years. This time delay, combined with explanations that are vague at best make intelligent discussion about purchasers of US Treasuries impossible. The more you dig into the data, the less sense it makes. With the recent release of the Fed’s discount window activity, I’d like to know how many believe demand for the last 3.5 Trillion of US debt wasn’t fueled entirely by the Fed. Now they’re playing Got your nose with us. So the next time Maria Bartiroma asks Lady Gaga, or whatever sock-puppet she happens to have on her show, “Who will buys US Treasuries when the Fed steps away?” An enlightened response might be, “I have no idea who was buying US Treasuries before the Fed stepped in. Do you Maria?” To which she will most likely reply, “So what sectors do you like going forward?” ***
? *Generally I shy away from correcting hot-headed Italian-Americans, but I believe Rick Santelli values truth and accuracy. I’m not sure how Rick calculated his recent claim that the government borrows 43 cents of every dollar they spend, but here’s how I calculated my numbers: In FY2009 & 2010 government spending was $3.5177T and $3.4558T respectively. Source: http://www.cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables%5B1%5D.pdf (page 1) Total borrowing was $1.8851T for FY 2009; $1.6518T for FY 2010 Source: http://www.fms.treas.gov/bulletin/b2011_1.pdf (Table OFS-2) US GDP 2008: $14.369T (World Bank – 2010 data not available) Source: http://www.google.com/publicdata?ds=wb-wdi&et=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=gdp US GDP 2010: $14.624T (IMF) Source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
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| Adrian Douglas: Deception and cover-up at the Fed Posted: 03 Apr 2011 05:10 AM PDT How the Fed hid the disappearance of $32 million and its recognition of the stock market bubble. * * * By Adrian Douglas The title of this article is borrowed and modified from the book "Deception and Abuse at the Fed" by Robert C. Auerbach. The minutes of each Federal Open Market Committee (FOMC) meeting are released within weeks of the meeting having occurred. The full transcript is available only five years later. I recently started reading in depth the transcripts of the FOMC meetings and discovered some shocking information. Let's consider the December 21, 1999, meeting. The minutes can be found here -- http://www.federalreserve.gov/fomc/minutes/19991221.htm -- while the full transcript is here: http://www.federalreserve.gov/monetarypolicy/files/FOMC19991221meeting.p... In the minutes the Board unanimously accepted the accounts of the System Open Market Account: "The Report of Examination of the System Open Market Account, conducted by the Board's Division of Reserve Bank Operations and Payment Systems as of the close of business on September 10, 1999, was accepted." ... Dispatch continues below ... ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf One would think that there was nothing of interest to see here; just mundane approval of accounting. But if we look at the transcript we get an entirely different picture that shows that the Fed contemplated that there could have been fraudulent diversion of funds or errors in accounting in the famous Exchange Stabilization Fund (ESF) that has received so much attention from GATA as one mechanism for manipulation of the gold market. * * * CHAIRMAN GREENSPAN. Without objection. Peter Fisher, you wanted to discuss the report of examination, I understand? MR. FISHER. Yes. I wanted to elaborate a little on Louise Roseman's memo to Don Kohn about the unresolved difference between the internal accounting records of the Markets Group Accounting and Control Unit and those reflected in the Integrated Accounting System regarding the System's net interest accruals on foreign currency investments. I thought it would be helpful if I gave a couple minutes of background, if you will bear with me. Last spring, as members of the Committee will recall, we entered into a series of transactions with the ESF to re-balance our euro and yen holdings so we could come to a better split both in terms of total holdings and the currency mix. This involved a number of transfers of ownership of a series of investments and resulted in quite a significant amount of accounting activity. In the course of reviewing that, our own accounting staff identified an error that had been introduced in the prior year in our treatment of the premium on bonds held in the accrual account, overstating the accrual account by about $5 million. In the course of confirming that, they identified an additional $26.6 million overstatement in the accrual account for interest on foreign currency investments. We have had a number of staff members working full time trying to trace the source of that $26.6 million overstatement. They have worked back through the records to December 1994, before which detailed records at the transaction level just no longer exist due to the routine and appropriate destruction of documents. The Board examiners were at our Bank to conduct an examination of the System Open Market Account in September and PricewaterhouseCoopers also has looked over our methodology to try to trace this overstatement back through time and find its source. Pricewaterhouse-Coopers is confident that we have traced it back as far as we can. They have tested our work papers and agree with our conclusion that we simply can't go back any further. There are two possible causes of this overstatement that we have to confront. One is the diversion of funds and the other is error. Now we cannot rule out the possibility of a diversion of funds. But people from our own audit function and from Pricewaterhouse-Coopers have reviewed the control procedures we've had in place for the last decade and are very comfortable with the conclusion that these control procedures are sufficiently robust that the likelihood of diversion is remote. It cannot be ruled out, but for diversion to have occurred it would have had to involve the collusion of many people -- just an extraordinary number of people -- on several different staffs. If anything, our control procedures run a little to the "belt and suspenders" direction in regard to control of the flow. So there is reasonable confidence that no diversion of funds occurred. The much more likely cause is a simple accounting error. The failure to credit the accrual account when cash was received would have left this account overstated. But we have worked the accounting back as far as we can take it and cannot find the erroneous entry or entries. Dave Sheehy, the New York Fed's General Auditor, and I are both looking into a fundamental reappraisal of our control procedures. We have introduced an additional mechanical check to maintain detailed records of the accrual stream by instrument, so that when a final principal payment is received we can trace the record all the way back on each instrument and double check the accounting. More fundamentally and more importantly, what troubles us is how we could have gone for so many years without scrubbing this account more vigorously. That is something we are looking into and we are going to be revising our control procedures -- both the audit procedures and those in our own Markets Group. The Board's staff and our accounting function at the New York Fed have worked out an accounting treatment to correct for both the $5 million and the $26.6 million errors. That involves reducing the accrued interest asset account by the entire $31.6 million, with an offsetting reduction in interest income on foreign currency investments. We will make that adjustment before the end of the year and spread it among all the Reserve Banks. Of course, for all of us with responsibilities for SOMA this is an embarrassing, indeed humbling, event. As a technical matter, though, I understand that Pricewaterhouse-Coopers is comfortable with the conclusion of both our accounting and audit function and the Board staff that this is not a material event for purposes of disclosure for any Reserve Bank. I would be happy to try to answer any questions. CHAIRMAN GREENSPAN. Is there any evidence of a surprising rise in standards of living of key people involved? MR. FISHER. No, there is not. CHAIRMAN GREENSPAN. Has somebody looked? MR. FISHER. Yes, we have looked into that. Many of the staff people are still at the Bank, though others are not. But we have found nothing of that nature. CHAIRMAN GREENSPAN. Were it an embezzlement, prior to what period would it have occurred? MR. FISHER. We only know that the difference existed prior to December 1994. CHAIRMAN GREENSPAN. It could have been any time prior to that? Is there a beginning point, other than 1914? MR. FISHER. The details certainly don't exist for pre-December 1994 records, so I don't know how we could determine the beginning point -- in 1973 or 1963 or where. Prior to 1994, the only interest income we were receiving in that account was coming from the BIS, the Bundesbank, and the Bank of Japan. So the source of the income was official institutions. It was really a very simple accounting process to bring that income in at that point; the complexities have been introduced since that time. So, as I say, Pricewaterhouse-Coopers and our audit function are confident in looking over the control procedures we have had in place that it's implausible that a diversion could have occurred. But we cannot rule it out. * * * What is the solution to this accounting problem? Just fudge the accounts! They reduced reported income to make the 31.6 million dollar problem go away. Here is a repeat of the relevant section: The Board's staff and our accounting function at the New York Fed have worked out an accounting treatment to correct for both the $5 million and the $26.6 million errors. That involves reducing the accrued interest asset account by the entire $31.6 million, with an offsetting reduction in interest income on foreign currency investments. We will make that adjustment before the end of the year and spread it among all the Reserve Banks. Of course, for all of us with responsibilities for SOMA this is an embarrassing, indeed humbling, event. As a technical matter, though, I understand that Pricewaterhouse-Coopers is comfortable with the conclusion of both our accounting and audit function and the Board staff that this is not a material event for purposes of disclosure for any Reserve Bank. It is shocking that PriceWaterhouse-Coopers should be "comfortable" that this is not a "material event" for the purposes of disclosure. Clearly the system is set up to deliberately deceive the public and avoid any transparency. Full transcripts of the FOMC meetings are available only after five years -- and what is the time limit before they destroy detailed records? You guessed it: five years. But there is more deception revealed in the transcript on an entirely different topic: Greenspan claimed that the Fed cannot recognize a bubble until after it has burst. That is a lie as shown by another section of the transcript. * * * MR. PRELL: All of this may well be stretching the point statistically, but I think it's worth sounding a note of caution that strong productivity gains and intense competition -- even accelerating productivity and intensifying competition -- do not by themselves ensure that there can be no step-up in inflation. Unless supply is completely elastic, which seems unlikely in the short run, demand can become excessive. Once again in recent weeks, the market has defied our notions of valuation gravity by posting an appreciable further advance. Moreover, it has done so in a way that seems to highlight the risk that it will continue doing so. I refer to the incredible run-up in "tech" and e-commerce stocks, some of which have entered the big-cap realm without ever earning a buck. To illustrate the speculative character of the market, let me cite an excerpt from a recent IPO prospectus: "We incurred losses of $14.5 million in fiscal 1999 primarily due to expansion of our operations, and we had an accumulated deficit of $15.0 million as of July 31, 1999. We expect to continue to incur significant ... expenses, particularly as a result of expanding our direct sales force. ... We do not expect to generate sufficient revenues to achieve profitability and, therefore, we expect to continue to incur net losses for at least the foreseeable future. If we do achieve profitability, we may not be able to sustain it." Based on these prospects, the VA Linux IPO recorded a first-day price gain of about 700 percent and has a market cap of roughly $9 billion. Not bad for a company that some analysts say has no hold on any significant technology. The warning language I've just read is at least an improvement in disclosure compared to the classic prospectus of the South Sea Bubble era, in which someone offered shares in "A company for carrying on an undertaking of great advantage, but nobody to know what it is." But I wonder whether the spirit of the times isn't becoming similar to that of the earlier period. Among other things, it may be noteworthy that the tech stocks have done so well of late in the face of rising interest rates. Earlier this year, those stocks supposedly were damaged when rates rose, because, people said, quite logically, that the present values of their distant earnings were greatly affected by the rising discount factor. At this point, those same people are abandoning all efforts at fundamental analysis and talking about momentum as the only thing that matters. If this speculation were occurring on a scale that wasn't lifting the overall market, it might be of concern only for the distortions in resource allocation it might be causing. But it has in fact been giving rise to significant gains in household wealth and thereby contributing to the rapid growth of consumer demand -- something reflected in the internal and external saving imbalances that are much discussed in some circles. Whether our assumed 75-basis-point increase in the fed funds rate would be a sufficient shock to halt this financial locomotive is open to question. * * * The Fed clearly recognized the tech bubble and even made reference to the infamous and most speculative South Sea Bubble. But they did not want to do anything because it was making the whole economy expand due to the wealth effect: If this speculation were occurring on a scale that wasn't lifting the overall market, it might be of concern only for the distortions in resource allocation it might be causing. But it has in fact been giving rise to significant gains in household wealth and thereby contributing to the rapid growth of consumer demand. Greenspan lied that the Fed could not recognize a bubble in advance. They did recognize it and even compared it to the South Sea Bubble and they purposefully let it continue because it was adding to household demand, a large part of that being driven by housing demand, and it was all founded on companies that had no or little fundamentals that were commanding ridicules valuations that were bound to crash bring the entire economy with it. And that is what happened. This transcript shows that the Fed cannot even manage the multi-billion dollar ESF fund, so how can they be trusted to run a multi-trillion-dollar bailout operation as was instigated in 2008? The answer is we can't; the recently released list of banks and institutions that received TARP funds and how much, pried loose by a Freedom of Information Act request by Bloomberg News reveals that yet again the Fed deceived Congress and the public by requesting the TARP funds to bailout America but sent much of the funding to foreign institutions. The transcript shows that when it discovers an accounting problem, the Fed fudges the accounts and decides that this is not a material event that needs to be disclosed in the annual reports of the Federal Reserve Banks. The Federal Reserve acts as the supervisor and regulator of the banking system. Clearly such breaches in fiduciary duties and accounting standards explains why the banks they supervise can thumb their noses at any banking regulations and run fast and loose with off-balance-sheet transactions, report falsely inflated and often record profits coming out of the biggest recession and banking crisis in 80 years, and pay their executives obscene bonuses. The FOMC transcripts give us only a glimpse of what is really happening in secret at the Fed. But from just scratching the surface one can be justified in extrapolating that it is hiding a web of corruption, lies, and deceit. This band of liars and cheats is responsible for the only global reserve currency, the U.S. dollar. If you own and hold precious metals bullion instead of dollars there are no counterparties, let alone counterparties who lie every time they move their lips and operate under a secrecy that is only partially lifted after five years, which is coincident with the destruction of all detailed records. ----- Adrian Douglas is editor of the Market Force Analysis newsletter (www.MarketForceAnalysis.com) and a member of GATA's Board of Directors. Join GATA here: An Evening with Bill Murphy and James Turk https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT The Gold Standard Now: It Can Work Today a dollar is worth 80 percent less than it was 40 years ago, and less than 5 percent of its value a hundred years ago. We deserve a dollar that is as good as gold, a dollar that will hold its value from year to year so we can be financially secure and our economy can generate more and better jobs. For most of America's history, our dollar was literally as good as gold. But on August 15, 1971, our politicians destroyed the link between gold and the dollar. They destroyed the foundations of our economic system. A new Internet site, TheGoldStandardNow.org, provides news and cutting-edge analysis about this most important issue and explains how the gold standard worked in the past and how it can work in the future. Visit us today: http://www.thegoldstandardnow.org/about/137-welcome-newsmax
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| Real Bullion Begins to Decouple from Paper-Bullion Posted: 03 Apr 2011 04:53 AM PDT In a commentary from the middle of January ("Precious Metals Default Scenarios"), I explained how large differences between the gold and silver markets would mean that a "default" in the gold market would be much different than a default event in the silver market. Specifically, with silver having major industrial demand and with the world's silver inventories having literally been "consumed", there will likely be an outright "fail to deliver" which leads to a formal default in the silver market. Conversely, the gold market is much different. To begin with, all of the world's gold has been preserved. While this by no means indicates that gold is "abundant", it does mean that in any potential-default scenario, the bankers would likely be able to scrape together enough ounces to forestall such an occurrence. Alternately, because so much of the "gold market" merely trades paper between themselves, then the mechanism of "cash settlement" (i.e. informal default) can be used to prevent a formal default from occurring. I further added: In reality, as the "cash settlements" continue to get larger and more frequent, at some point one or more large holders in this banker Ponzi-scheme are going to lose their nerve, and insist on real bullion rather than paper bribes. Such an event does not need to result in an official default. It merely needs to spook the herd. [emphasis mine] As word gets out of some prominent investor refusing any quantity of banker-paper in favor of physical bullion (i.e. real "money"), this will cause the holders of $100's of billions of dollars of "paper bullion" products to ask themselves a very pointed question: "am I holding 'bullion' or am I holding 'paper'?" [emphasis mine] More importantly will be their response to such a question. The two obvious responses are either to demand delivery or to sell their paper bullion... Flash forward to today, and we suddenly see a new reality in the gold market. Investors are selling their paper-bullion, while loading-up with real "physical" bullion in ever-increasing quantities. Three news stories released over the weekend highlight this "new reality". On the one hand, we see the most-dubious of all the paper bullion-ETF's, the SPDR Gold Trust (more commonly known by its trading symbol "GLD") experiencing the largest liquidation of units in the history of this fund. From the 1st of January until the end of March, unit-holders dumped 5.4% of this banker Ponzi-scheme. Meanwhile, in the world of real bullion, two other news items highlight the fact that the sellers of actual, physical bullion are seeing their own inventories cleaned-out as fast they can lay their hands on more metal. One headline reads "Gold Bullion Dealers Rejoice At Continued Market Climb In Improving Circumstances". Obviously these sellers of actual gold didn't see any "liquidation" taking place in their businesses. At the same time, the irrepressible U.S. Senator, Ron Paul has some pointed questions for the U.S. Mint – which is failing its statutory mandate to provide a supply of legal tender gold and silver coins equal to demand. Paul has hinted at a solution to help increase the supply of U.S. minted coins. Of equal, if not greater importance, Paul is also crusading to eliminate the ridiculous taxation on gold and silver legal tender coins – which (as I have often pointed out) amounts to a ridiculous tax-hypocrisy, where "good money" (i.e. gold and silver coins") is taxed, while the bankers' worthless paper currencies are not. Clearly the time has come for investors to ask themselves whether we are now seeing the early stages of the disintegration of the paper-gold market. We can only be encouraged that we must be close to such an event when we read all of the pathetic excuses made by Reuters for the large decline in GLD holdings. |
| Michael Kosares: Saudi king got far more gold for his oil in 1933 Posted: 03 Apr 2011 04:38 AM PDT 12:33p ET Sunday, April 3, 2011 Dear Friend of GATA and Gold: More excellent analysis of why gold is not in a bubble but instead grossly underowned comes today from Michael Kosares, proprietor of Centennial Precious Metals in Denver, who compares gold's price with oil's at a crucial moment in the history of oil not quite 80 years ago. Kosares' analysis can be found at Centennial's Internet site, USAGold.com, here: http://www.usagold.com/cpmforum/2011/04/03/ibn-sauds-35000-british-sover... Or try this abbreviated link: USAGold publishes an occasional free e-mail newsletter with such analysis and you can subscribe to it here: http://www.usagold.com/info/newsletter.html CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT The Gold Standard Now: It Can Work Today a dollar is worth 80 percent less than it was 40 years ago, and less than 5 percent of its value a hundred years ago. We deserve a dollar that is as good as gold, a dollar that will hold its value from year to year so we can be financially secure and our economy can generate more and better jobs. For most of America's history, our dollar was literally as good as gold. But on August 15, 1971, our politicians destroyed the link between gold and the dollar. They destroyed the foundations of our economic system. A new Internet site, TheGoldStandardNow.org, provides news and cutting-edge analysis about this most important issue and explains how the gold standard worked in the past and how it can work in the future. Visit us today: http://www.thegoldstandardnow.org/about/137-welcome-newsmax Join GATA here: An Evening with Bill Murphy and James Turk https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: http://www.gata.org/node/16 ADVERTISEMENT Prophecy Resource Spins Off Platinum/Palladium Venture: Company Press Release, January 18, 2011 VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy. PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding. Following the transaction: -- Prophecy will own approximately 90 percent of PCNC. -- PCNC will consolidate its share capital on a 10 old for one new basis. -- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp. -- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings. Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000. For the complete announcement, please visit: http://prophecyresource.com/news_2011_jan18.php
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| Posted: 03 Apr 2011 04:38 AM PDT 1 oz SILVER KEISER – EARLY RELEASE .999 PURE SILVER Share this:
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| International Forecaster April 2011 (#1) - Gold, Silver, Economy + More Posted: 03 Apr 2011 04:35 AM PDT The seeds of today's monetary problems were laid at Bretton Woods, NH in 1944, as a combination of socialists, communists and fascists laid the groundwork for the IMF, the World Bank and the eventual elimination of gold from the monetary world. The Federal Reserve's role was to bring that about from behind the scenes.
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| Posted: 03 Apr 2011 04:32 AM PDT Since the Masters of the System have decided to arbitrarily "move the goalposts" to suit themselves by printing money in unlimited quantities, fixing interest rates at artificially low levels, and backstopping the bond market etc, it is incumbent on us as investors to find a fixed point of reference and safe anchorage, the better to weather the financial storms that their crassly irresponsible policies are bringing upon us. That fixed point of reference is gold.
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| King Ibn Saud's 35,000 British sovereigns – Gold's historic undervaluation versus oil Posted: 03 Apr 2011 03:49 AM PDT The Wikileaks/Financial Times revelations on significant gold buying interest in the Middle East — notably Iran's central bank, Jordan's central bank and Qatar's sovereign wealth fund — brought to mind the story of King Ibn Saud and his sale of oil concessions to the major oil companies. In payment he received 35,000 British sovereigns — a coin many of you hold in your own sovereign wealth funds. The good king understood the difference between the value of gold and the value of a paper promise. At the time (1933), the British sovereign's value stood at $8.24 each, or $288,365 for the lot. The price of oil was about 85¢ a barrel, and a British sovereign could buy about ten barrels. Today those same sovereigns would bring a little less than $12 million at melt value ($338.00 each) and a barrel of oil is selling for about $115. Thus, a British sovereign can buy a little under three barrels of oil — a statistic which gives you an inkling of gold's current undervaluation. For gold to buy the same amount of oil now that it did in 1933, the price would have to go to nearly $5000 per ounce — an interesting calculation for those who think gold is overvalued and in a bubble. In the gold market where there's smoke, there's fire. If members within one class of investors — e.g., central banks, sovereign wealth funds or hedge funds — you can be assured that other members of that same group are similarly involved. Recent activity within the hedge fund industry with respect to gold is exemplary. It follows then that if Iran, Qatar and Jordan — themselves threatened by the popular Pan-Arabic uprisings — are acting on their interest in gold, can Saudi Arabia, the United Arab Emirates and Kuwait be far behind? If so, they will join several nation states and a bevy of hedge and sovereign wealth funds in the pursuit. The problem they will encounter is an old one. There simply is not enough physical gold available at any given point in time to satisfy the needs of any one of these major players, let alone all of them. All of this, of course, will resolve itself in the price for which the metal sells. I note with interest that Barclays Bank — one of the five members of the London Gold Fix and an institution well-situated to experience first-hand the interest in physical metal — has predicted a top price of $1620 per ounce. Predictions by other Fix members are equally bullish. Scotia-Mocatta predicts a high range of $1500 to $1600 with a possibility of spiking higher. Deutsche Bank is predicting $1511 per ounce for 2011 and $2000 per ounce for 2012. Both Societe General and HSBC, the two remaining members, are calling for a top-end price of $1550 per ounce. These bullion banks are in a better position than most to ascertain the sources of demand, and they know better than anyone, the extent of global interest among key players. By the way Goldman Sachs, though not a member of the Fix, is still widely monitored for its opinion on gold. It is calling for a price objective of $1750 per ounce in 2011. Michael J. Kosares
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| Precious Metals - Week of 4.3.11 Posted: 03 Apr 2011 03:45 AM PDT Utah Doubles Down on Gold Laws Amid Inflation Fears, Distrust of Fed GATA (1 April 11)
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| Why Everyone Should Buy Physical Silver Posted: 03 Apr 2011 03:21 AM PDT The first fact that jumps off the page is that the future for silver looks remarkable with industrial silver demand rising from 15,160.19 tonnes [487.4 million ounces] in 2010 to 20,712.29 tonnes [665.9 million ounces] in 2015. Much of the growth in the global total of industrial silver consumption will be driven by stronger demand for a number of established uses including the manufacture of electrical contacts and the use of silver in the photo voltaic industry. New uses center on silver's antibacterial qualities, while other new uses tend to make use of its conductive properties, including solid state lighting and Radio Frequency Identification (RFID) tags. Overall please note that silver's importance in the technology of the day is huge. We go so far as to say that the demand from silver has transformed from a want to a need! Whether we are in a boom or bust silver's demand will remain robust. It is now needed to make all facets of an economy run well and at all levels, even down to individual needs. This secures its future and assures us that silver prices are well supported. Here is the list of the amounts used in different applications that emphasize this point. - Cell phones used 404.35 tonnes [13 million ounces] of silver last year. - Computers consumed 684.29 tonnes [22 million ounces]. - Thick film PV consumed 1,461.90 tonnes [47 million ounces] in 2010. - Automobiles which used 1,119.75 tonnes [36 million ounces] of silver. - Electrical and electronics demand for silver reached an all-time high of 7,555.21 tonnes [242.9 million ounces]. - Solar Power in 2011 is expected to reach 2,177.29 tonnes [70 million ounces], up 40%. - RFID tags in 2010 reached between 31 and 62 tonnes with a long way to go before reaching full market. - Water purification used 62 tonnes [2 million ounces] set to grow to 74.65 tonnes [2.4 million ounces]. - Medical applications may grow strongly to reach 93.3 tonnes [3 million ounces] by 2015. - The use of nano-silver in goods packaging and hygiene combined would consume 124.4 tonnes [4 million ounces] of silver over the next five years. Silver is consumed More Here..Invest In Silver Today! 
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| Gold Forming Bearish Double Top? Posted: 03 Apr 2011 02:34 AM PDT Looking at a short term chart it sure looks like we are forming a double top here (see chart below). If so that could take us to at least the lows of early Jan. Time will tell. The weakness in the trading has been mentioned before, it still is there. We need a strong move into new highs to overcome.
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| Posted: 03 Apr 2011 01:42 AM PDT Ron Paul on Legal Tender Laws, Coin Shortages, Interest Rates, Municipal Bonds, the Gold Standard A few months ago I made the comment that whoever got congress to repeal taxes on gold would win the White House. Looks like Ron Paul will be America's next President. As the price of Gold and Silver continue to [...]
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| How Far Are We From a Gold Standard? Posted: 03 Apr 2011 01:11 AM PDT Soner Kistak submits: According to The Concise Encyclopedia of Economics, the notion of a gold standard can be defined as:
A country under the gold standard would set a price for gold and would buy and sell gold at that price. This effectively sets a value for the currency. The "gold standard" executions might either be done fully or partially. For example, the Swiss franc was based on a partial 40% legal gold-reserve requirement between 1936 and 2000. On the separate subject of monetary supply, there are many terms to define and measure the money supply. While there are conflicting opinions as to their usefulness, many of us come across terms such Complete Story »
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| Is Gold in a Bubble Now? Both Sides of the Coin Posted: 03 Apr 2011 12:20 AM PDT By way of background, it strikes me that many media journalists and Internet newsletter writers and commentators either don't address the correlation between what they speak or write about, and other factors that are relevant to their topic. For example, many of those who speak and write about gold don't distinguish between physical gold as a safe haven and gold in the context of mining company shares. For some time now I have believed that those who hold physical gold solely as a safe haven shouldn't worry themselves a whole lot about gold's day to day price. At the same time, those trading or investing in gold exploration and production company shares ought to worry a lot about gold day to day price. I suggest you keep these things in mind as you read this commentary and some or all of the articles it links to. If you are interested, Complete Story »
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| Posted: 02 Apr 2011 10:38 PM PDT Bullion Vault
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"Still printing money and accommodating the banks, folks," Mr. Bernanke led off, "still blowing bubbles. I'll take any and all questions."
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